Finance
The purpose of a 'mortgage commitment letter' in a Massachusetts transaction is:
AThe final approval of the loan with all conditions satisfied
BA written commitment from the lender to provide a loan, subject to specified conditions✓ Correct
CThe mortgage note signed at closing
DThe lender's appraisal report
Explanation
A mortgage commitment letter is the lender's written agreement to make the loan, subject to stated conditions (such as satisfactory appraisal, clear title, etc.).
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Key Terms to Know
Contingency
A condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Discount PointsPrepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
Promissory NoteA written promise to repay a loan under specified terms — the borrower's personal financial obligation in a real estate transaction.
AppraisalA professional estimate of a property's market value prepared by a licensed or certified appraiser.
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